Question - Company Cars?

wannabebeanwannabebean Feels At HomePosts: 72Registered
Hello All

I have a question that relates to a client.

The client has purchased (on HP over three years) a CAR (diesel with a low carbon footprint). He is currently paying £275 PCM to the Loan Company (HIRE PURCHASE PROVIDER). He pays this out of HIS OWN PERSONAL BANK ACCOUNT as the HP agreement was in his own personal name. He then pays the £275 back into his own personal bank account every month (to the exact amount to the penny with the payment marked as "CAR").

Can he claim the £275 PCM as a business expense? Car used only for business? How do you treat this?

Very confused about this one.

Thank You for any help

Comments

  • Gem7321Gem7321 Experienced Mentor DevonPosts: 1,438MAAT, AAT Licensed Accountant
    edited October 2014
    Please confirm is your client a company or a sole trader? As in your duplicate post on the MiP forum you have not specified but in this title you mention company.
  • wannabebeanwannabebean Feels At Home Posts: 72Registered
    Hi

    Ltd
  • Gem7321Gem7321 Experienced Mentor DevonPosts: 1,438MAAT, AAT Licensed Accountant
    If the HP is not in the name of the company then I would say no. Obviously even if it was in the name of the company only the interest element of the HP would be allowable against profits and there would be a BiK issue for the director. These payments will need to go against his directors loan account (or salaried or BiK as payment of personal expenses) and he needs to claim mileage.
    MarieNoelle
  • Gem7321Gem7321 Experienced Mentor DevonPosts: 1,438MAAT, AAT Licensed Accountant
    And confirmed by peaman on your duplicate thread.
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